BlackBerry's downfall and rebirth

Most of BlackBerry's decline can be pinned on leadership that was deaf to what people really wanted from a smartphone. While Apple and Google put their energy into easy-to-use interfaces, desktop-class web browsing and wide app selections, BlackBerry was obsessed with network efficiency, keyboards and security. That was great for carriers and the enterprise crowd, but not everyday users who just want to check Facebook or share photos. The company could afford to coast on its successes for years, and made attempts at modernization with devices like the Storm 9500 you see here. But it didn't start taking the threat seriously until it started overhauling its platform in 2010, and by then it was too late -- Android and iOS were here to stay, even among office workers.

The firm's more sincere attempts at recovery didn't really pass muster. Its answer to the iPad, the PlayBook, was a half-finished product that tanked almost as soon as it shipped. BlackBerry 10, meanwhile, wasn't a big enough improvement to entice people who had left the platform. While BlackBerry tried replacing founders Jim Balsillie and Mike Lazaridis with Thorsten Heins, the new leader both inherited a lot of problems and made mistakes of his own. He pushed the all-touch Z10 phone when loyal fans were clamoring for the keyboard-toting Q10, and downplayed service initiatives (such as replacing text messaging with BBM) that would have provided revenue beyond the struggling hardware business. His tenure was defined by massive financial losses and extensive layoffs that left BlackBerry a pale shadow of its former self.

John Chen, who became CEO after Heins' abrupt departure, has spent much of the past several months in rescue mode. He shifted manufacturing to Foxconn, sold real estate, consolidated model lineups and otherwise acknowledged that BlackBerry needed to forgo its dreams of returning to the mobile big leagues, at least for now. So far, these short-term measures have worked. Besides calling an end to layoffs, Chen has managed to (mostly) stem losses that might have proven fatal. He ultimately hopes to have the company turning a profit by 2016. So, how is he going to get there?

For the most part, Chen is focusing on BlackBerry's most loyal customers: corporations and governments that thrive on ultra-secure communications. He's building a security technology center in Washington, DC, and recently bought Secusmart, a company that specializes in locking down data and voice. BBM Protected makes it tough to crack entire messages, too. The exec is also putting a heavier emphasis on services, like device management and mobile payments. For the most part, they'll be the bread and butter of BlackBerry's revenue; phones will stick around, but they're not nearly as important as they used to be.

The smartphones that are left at BlackBerry reflect Chen's concentration on loyal fans... with one exception. The Z3 is the only new touch-only device released so far, and it's targeted at markets that still love their BlackBerrys, like Indonesia and the Middle East. The Classic caters to traditionalists with its familiar design, which even has the trackpad that disappeared on the Q10. The oddball is the Passport -- it mates a keyboard (with trackpad-like features, no less) to a square touchscreen. BlackBerry is betting that the unusual shape is perfect for workers who need to check calendars and edit spreadsheets on the move.

As for software, which is what got BlackBerry into trouble all those years ago? Right now, Chen and crew aren't planning any revolutions. BlackBerry 10.3's biggest feature will be Assistant, a voice-activated helper that largely echoes what we've seen from Apple (Siri), Google (Google Now) and Microsoft (Cortana). The company isn't relying on its own app catalog to carry water, for that matter. While native BlackBerry apps will be available, 10.3 users will also have access to Amazon's entire Android app library. And BlackBerry Messenger, once a sacred cow that sold devices, is continuing its expansion to other platforms.

Whether or not all this works is a tough call. Chen has pledged to keep making smartphones as long as they're viable, but it's hard to know when (or if) sales declines will level off. The CEO hasn't ruled out exiting the business if it shrinks below sustainable levels. Also, rivals are quickly encroaching on BlackBerry's sacrosanct enterprise business through software and services, such as Android for Work (which takes on BlackBerry Balance) and Apple's deal with IBM. Strictly speaking, you don't need BlackBerry for powerful messaging or secure devices these days. Chen's pragmatic approach may have prevented a financial collapse, but growth will only come so long as he can convince companies that his services (and potentially, hardware) stand out in a very crowded field. If he doesn't, BlackBerry may fade away for good.